Toyota mid-year review 2010

Toyota Australia’s Mike Breen spoke with CarAdvice about the first half of 2010 and looked ahead to the rest of the year…

The year so far

Toyota sales have increased 14 percent in the first six months of 2010, marginally below the 16.7 percent industry average increase. The introduction of Hybrid Camry has seen sales of the mid-sized favourite swell 35 percent, while sales of Prado, Landcruiser and HiLux 4×4 have also grown substantially. Aurion and Prius have been two of the bigger losers so far, each shedding sales and market share compared with 2009.

Mr Breen said Hybrid Camry was largely responsible for the loss of Prius sales, but he said the reduction was in line with predictions and not a cause for concern.

“We’ve sold between 2000 to 3000 [Hybrid Camrys] year-to-date and it’s still gaining market acceptance at this stage. We’re seeing sales increase slowly through the year … [June] private sales we were around 657, which was good,” he said.

Although total brand sales were 13,237 units ahead of the economically depressed first half of 2009, Toyota’s market share decreased by 0.47 percentage points to 20.2 percent – the third-worst result behind Ford (-0.94) and Honda (-0.73). At 20.2 percent however, it still means that Toyota is in a commanding position at the top of the Australian automotive industry, with more than one in every five new vehicles sold adorned with an elliptical T badge.

Model

2010 ytd sales

2009 ytd sales

Change

2010 ytd

market share

2009 ytd

market share

Aurion

6102

6588

-7.4%

12.5%

14.1%

Avensis

303

428

-29.2%

5.0%

8.7%

Camry

11,400

8443

35.0%

37.4%

31.1%

Corolla

19,127

17,573

8.8%

15.9%

17.7%

HiLux 4×2

8171

7917

3.2%

26.4%

23.7%

HiLux 4×4

13,217

11,196

18.1%

27.2%

26.8%

Kluger

6455

5929

8.9%

13.9%

17.0%

Landcruiser PU/CC

3518

2859

23.1%

7.2%

6.8%

Landcruiser Wagon

4495

3630

23.8%

72.5%

69.9%

Prado

9132

6336

44.1%

19.7%

18.2%

Prius

1019

1211

-15.9%

0.8%

1.2%

RAV4

6898

6142

12.3%

12.5%

14.8%

Rukus

297

0

0.2%

Tarago

816

840

-2.9%

13.6%

17.2%

Yaris

11,077

10,098

9.7%

16.1%

17.4%

Other

5443

5043

7.9%

Total

107,470

94,233

14.0%

20.2%

20.7%

Note: Other sales include Coaster and Hiace variants.

Talking points

Toyota has without question been the biggest automotive story this year courtesy of a global recall of nine million Toyota and Lexus vehicles. Lined up nose to tail, the vehicles would cover the entire circumference of the Earth along the equator, and stacked one on top of the other would be the same height as the Earth. Around 5.3 million were affected by faulty floor mats while more than 5.5 million were affected by other issues including brake and accelerator pedal defects, spare tyre carrier cable corrosion and electronic stability control faults. More than two million vehicles recalled in the US to repair faulty accelerator pedals in January were already involved in floor mat recalls from November 2009.

Toyota Australia was largely immune to the recall as its vehicles are sourced from Japan (with the exception of the Thai-built HiLux) and therefore have different suppliers to many of the vehicles affected in the US. In total, 2378 Prius models were recalled in February to reprogram the ABS which had the potential to give an inconsistent brake feel during slow and steady braking on rough and slippery roads. Two cases were reported in Australia, but no accidents were linked to the issue.

Mr Breen said Toyota Australia did surprisingly little in terms of damage control or public relations work when it came to the global recalls earlier this year. “We actually didn’t do a lot. We monitored what was happening overseas and through basically the motoring media and the media generally they understood that a lot of these things were happening in the United States.

Mr Breen said he did not believe the global recalls have had an impact on the confidence of Australian customers at this stage. “We haven’t noticed any reaction, but obviously time will tell. People don’t just come into the market in one day to buy a car so over time there may be some impact.”

Another other large number affecting Toyota Australia more directly was a one-off tax adjustment of almost a quarter of a billion dollars. The company offered little explanation for the tax hit – which turned a before-tax profit of $182.3 million into an after-tax loss of $107.9 million – other than that it was for “prior years”. Toyota Australia’s Glenn Campbell told CarAdvice that while the company would not comment on individual tax details, the $246.7 million settlement was reached “following a thorough review with the Australian Tax Office of a very complex matter.”

“We believe that we conduct our operations according to all relevant rules and regulations regarding financial matters,” Mr Campbell said. “Reviews by tax authorities are a normal part of business for international companies doing business in Australia and we would expect to work with the ATO on this kind of matter.”

Mr Campbell would not be drawn on whether Toyota Australia would return to the black for 2010/2011 or if it was anticipating further taxes this year. “We will not speculate on any future negotiations. As always we will continue to work cooperatively with the ATO through any matters relating to tax,” he said.

The introduction of the small, box-shaped Rukus to the local line-up has been referred to internally as a highlight for Toyota and its first big step towards attracting younger people to the brand. Targeted at the lucrative Gen-Y market, the current generation Rukus is far from youthful itself however, having been sold as the Scion xB in the US since 2007. In May (its first month on sale in Australia) Rukus found 175 homes, with that number dropping to 122 last month. Toyota is aiming to sell 1800 Rukus vehicles each year and will have to continue to average 150 sales per month to achieve that goal.

Battling it out in the ultra-competitive small car segment, it is easily accounting for its obvious rival – the similarly boxy Kia Soul – which sold just 249 units for the first six months of 2010, after selling 407 in 10 months on sale last year.

Toyota recently revealed that 55 percent of Rukus customers were aged below 50, with the obvious extrapolation being that 45 percent were 50 or older. The average age of Toyota customers in Australia is currently 54. At such low volume, it is unlikely Rukus sales alone will lead to a significant reduction of the average age, but Toyota will be hoping that youth-focused vehicles like Rukus will attract younger people to showrooms and stimulate sales of volume vehicles currently popular with older customers.

Still to come in 2010

Mr Breen admitted there were no major changes or facelifts scheduled for the remainder of 2010, with “maybe some little technical changes and some special editions” the best that local Toyota fans can look forward to.

The next new model launch will be the FJ Cruiser – a Hummer-inspired youth-focused four-wheel drive – which is due in the first quarter of 2011. Mr Breen said Toyota believed boxy, SUV-style vehicles like FJ Cruiser and Rukus would play a key role in attracting new buyers to the brand.

He also confirmed that two vehicles with the potential to attract a younger demographic – the iQ and the Auris (Corolla) Hybrid – were of interest to Toyota Australia but unlikely in the short- to medium-term, with no plans to introduce them at this stage.

“The iQ would be unfortunately for us a little too expensive. In Europe they market it above the Yaris, but with the volumes that we bring in we think the car would just be too expensive. And the Auris Hybrid, it’s built in the UK it’s sold in the UK, and we have the Hybrid Camry here, so there’s no plan to bring a Hybrid Corolla in at this stage.”

Australian International Motor Show

Toyota announced earlier this month that the FT-86G Sports Concept would make its international motor show debut in Sydney. The FT-86G is a longer, wider and lower version of the rear-wheel drive FT-86 with a larger front air intake, visible intercooler and vented bonnet, as well as a carbon-fibre wing, diffuser and oversized twin exhausts.

Mr Breen said Toyota Australia had requested to be considered for a production version of the FT-86 and was still negotiating a possible introduction of that vehicle. He said the crowds around the FT-86G at Sydney would give an indication of the level of interest in the vehicle in Australia. “That’s primarily why we’re doing, it to see what type of response we get. I think we’ll get a pretty positive response,” he said.

As for any other motor show surprises, Mr Breen remained tight-lipped: “You’ll have to wait and see.”

Highlights/Successes

“I think the highlight of this year so far has been the launch of the Rukus which has been very successful. I think the market’s rebounding, there’s some positive things coming out of the market at the moment.”